KUALA LUMPUR, Feb 21 — The Institute for Democracy and Economic Affairs (Ideas) is urging the government to explore new sources of revenue in Budget 2023, due to be re-tabled this Friday.
Chief executive officer Dr Tricia Yeoh said the institute welcomed the government’s hints that the upcoming budget will focus on fiscal consolidation and debt management, however, budget consolidation should not rely solely on spending cuts.
In a statement today, she said the government revenue is already low and trails comparative peers.
“With government revenue expected to continue declining in 2023 due to moderating crude oil prices, the government should consider revising the personal income or sales and services tax.
“A conversation around the return of a form of consumption tax will also need to urgently happen in parallel with a revised social safety net,” she said.
The International Monetary Fund (IMF) recommends a tax yield of 15 per cent of the gross domestic product (GDP) as the minimum required for sustainable development.
In 2021, Malaysia’s tax revenue only stood at 11.2 per cent of the country’s GDP. This comes after a decade of steady decline from a high of 15.6 per cent of the GDP in 2012.
— Bernama
